One of the largest exits of a venture-backed company based on the East Coast was when Right Media sold to Yahoo for $850 million in 2007. In this episode of Founder Stories, Mike Walrath tells host Chris Dixon how Right Media got started in the middle of the online ad bust, lost its biggest customer and almost went out of business, just before it launched its eventual business idea of an online ad exchange.
The ad exchange turned out to be quite lucrative. Right Media signed MySpace as a customer, and then attracted an investment from Yahoo, which bought the entire company. In the video below, Walrath continues to explain how he went about to build a liquid exchange for ads. The way he did it was by getting the ad network intermediaries first. He also recalls the buying frenzy that began when DoubelClick was put on the market, drawing a $3.1 billion bid from Google, followed by Microsoft’s $6 billion deal to gobble up aQuantive. “It was a wild time.” Walrath remembers, “I was getting calls from bankers every day.”
When DoubleClick was put on the market by its private equity investors that forced a decision point on the other players. “As long as DoubelClick stayed independent,” explains Walrath, “nobody else had to do anything.” But “once one went, then they are all going to go.” He had to figure out where he wanted Right Media to be in the sequence of M&A events which unfolded. At the end of the interview, Dixon asks him if the fact that Yahoo was already an investor predetermined the outcome, and teh two get into a nuanced discussion about the difference between rights of “first refusal” and of “first offer.”
Be sure to also watch Part I of Walrath’s interview that was posted over the weekend. You can also check out other previous episodes of Founder Stories or subscribe in iTunes.
Investor, Advisor and Founder of start up and expansion stage companies. Formerly Founder and CEO of Right Media Inc. Walrath founded Right Media, Inc., (formerly Right Media, LLC) in 2003. He served as CEO until the company’s July 2007 sale to Yahoo. He was a Senior Vice President at Yahoo until November 2009. He co-founded early stage investment firm and incubator WGI Group with Jonah and Noah Goodhart in 2007. Before Right Media he had a successful career at...
Founded in 2003, Right Media is a Yahoo! company based in New York, with offices in London, Moscow, Eugene, San Francisco and Tallahassee. Right Media is the host of the Right Media Exchange, launched in 2005. The Right Media Exchange platform connects digital advertising companies and provides an opportunity for these participants to reach their audiences on their own terms. RMX is a holistic marketplace for managing an ad business–from full ad serving, to business development, to business expansion.
Chris Dixon is a Partner at and co-founder of Founder Collective. He is also a contributing writer for TechCrunch. He previously was the CEO and Co-founder of SiteAdvisor, which was acquired by McAfee, and Hunch, which was acquired by eBay. In addition to his work with Founder’s Collective, Chris is a personal investor in early-stage technology companies, including Skype, TrialPay, DocVerse, Invite Media, Gerson Lehrman Group, ScanScout, OMGPOP, BillShrink, Oddcast, Panjiva, Knewton, and a handful of other startups that...
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